Handling Negative Salaries

Handling Negative Salaries 

ZenHR allows you to effortlessly manage negative salary balances. When an employee’s deductions exceed their income, ZenHR offers two streamlined solutions: roll the negative balance into the next payroll cycle for continuous processing or execute an off-cycle adjustment to immediately clear the deficit. This ensures your payroll remains precise, efficient, and transparent. 

TABLE OF CONTENTS

• How to Activate This Feature 
• Manage Salaries 
• Salaries Batches
• My Salaries
• Financial Integrations

How to Activate This Feature 

User Menu → System Preferences → Payroll Setup  

In the payroll setup, a new section called Negative Payroll Balance is added at the end of the page. 

Enable the toggle to activate this feature. You’ll have the choice to carry over the balance or record it as an off-cycle payment. 

Then define default names for salary transactions, such as Negative Salary Settlement for income and Negative Salary Deduction for deductions.

Manage Salaries 

Main Menu → Payroll→ Manage Financials → Manage Salaries

On the Manage Salaries page, a new column called Negative Salary Settlement will appear when the feature is enabled.  

After salary calculations, users will be able to either wait for the next payroll run to deduct the negative amount from the next month’s salary or add an off-cycle transaction if the employee prefers to settle it immediately.   

If no negative salaries exist, this column will remain hidden. 

If the user chooses to wait for the next payroll run, the negative amount is carried over to the next payroll cycle as a deduction transaction. A clearance transaction is created in the original month to balance the payroll. Pay slips and reports will include details of the original month and year from which the negative salary originated. 

To pay an off-cycle transaction click “Mark as Paid” beside the negative amount in the Negative Salary Settlement column.

Then select off-cycle transaction type, add the payment date, and click “Mark as Paid”.

The system will then label the amount on the table as Paid ?, with a tooltip that includes the off-cycle payment details.

Salaries Batches

Main Menu → Payroll→ Manage Financials → Manage Salaries → Salary Batches

On the Salaries Batches page, the Negative Salary Settlement column will display the payment status as either Paid,  Paid ? or Awaiting Payment. 

Note: Users will be notified when there are any negative salaries.

My Salaries

Main Menu → Payroll→ Requests → My Salaries 

The My Salaries page will also include a Negative Salary Settlement column that reflects whether the amount is paid or awaiting payment. If there are no negative salaries, the column is hidden.

If an employee is terminated with an unresolved negative salary balance, the amount will be accounted for in their final termination settlement.

Financial Integrations

When setting up financial integrations, you can now add negative salaries. They can be added in under GL Accounts in the financial integrations setup.